The lab grown diamond industry which penetrated the jewellery industry and claimed a significant share of the industry is currently faced with challenges that have stemmed from overproduction that has resulted in falling prices and quality issues which has eroded consumer confidence.
The entire lab grown diamond industry which has been growing on a strong the past few years has arrived at point where the industry is faltering largely due to over production of these synthetic diamonds. Overproduction generally results in supply exceeding demand which in turn causes prices of products to decline and the jewellery industry is no exemption to this concept.
The overproduction according to GTRI (Lab Grown Diamond Industry Think Tank), and overstocking of natural diamonds has resulted in a perfect storm that has tugged prices of both diamond versions to their lowest point in years. To make matters worse quality issues with lab grown diamonds attributed to poor quality control has cause consumers to lose confidence in synthetic stones which has supressed demand even further.
The Global Trade Research Initiative (GTRI) also added that in order to address these challenges, a variety of measures must be put in place that would turn things around for the industry and this must be done as soon as possible. GTRI also cited that the current large imports of lab grown diamonds by India is also an issue that must be addressed along with clear and present policies that revolve around quality standardisation and certification of each stone.
Other aspects of the industry based on the perspective of industry players includes the urgent need to improve production processes towards cost reduction and enhanced quality of lab grown gemstones that has captured a significant percentage of the global diamond engagement ring market segment. Within the same context, a recent report by Business Insider boldly stated that the ‘boom’ for lab grown diamonds is over as far as jewellery industry observers are concerned.
This phenomenon is attributed to the fact that although lab grown diamonds are established as mainstream semi-luxury products, natural diamonds are back into the picture which is also due to their current lower prices. Industry experts are also expecting the prices of lab grown diamonds to slide further due to the current overstocking by diamond wholesalers and jewellers which has had a negative impact on the lab grown diamond engagement ring segment.
In essence it can be said that the entire diamond industry is ‘correcting’ itself or in other words stabilising. This is common when substitute products emerge into well-established markets and cause ripples that disrupt the market equilibrium said one industry analyst to Business Insider.
There have been several issues that require attention and among them are the quality of lab grown diamonds and the legitimacy of natural diamonds which is among the reasons stores are now using gadgets that are able to identify or rather spot the difference between lab grown diamonds and natural diamonds.